A growth investment option offered by a superannuation fund typically holds between 55% and 80% in growth assets, such as shares and property.
Although the term ‘growth fund’ covers those super funds with investment options having a 55% to 80% allocation to growth assets, some super funds describe the identical asset allocation as a ‘balanced’ option.
For example, superannuation ratings agency, SuperRatings, categorises a balanced option as 60% to 76% allocation to growth assets, while superannuation ratings agency Chant West’s description of ‘balanced’ however is 41% to 60% in growth assets.
In comparison, a growth option under the SuperRatings categories, is 77% to 90% allocation to growth assets, such as shares and property, while Chant West’s description is of growth is 61% to 80% allocation to growth assets. See table below for a comparison of the main investment options offered by super funds. Alternatively, for more information on how to compare investment options, and decide if your super fund is delivering decent returns, see SuperGuide article Super for beginners, part 20: Comparing your super fund’s performance.
Around 80% of all superannuation savings are held in the default investment option of super funds. The default investment option is a balanced or growth investment option, and is called ‘default’ because it is the destination when a fund member does not make an active choice.
If you have not selected your super fund, then your money is invested through the default investment option. If you have selected your super fund, but not selected your investment option, then your super savings are also invested through the default investment option of your fund.
Note: If you have never actively chosen your super fund, then your superannuation is held in a MySuper fund, and invested in a single investment option, which typically is allocated to a ‘balanced’ option when using the SuperRatings definition, and typically allocated to a ‘growth’ option when using the Chant West definition. (For more information about MySuper, see SuperGuide articles MySuper: Now at a super fund near you and MySuper: 113 super funds now available.)
Tip: When referring to SuperGuide investment performance articles, note that we mainly use the Chant West definition of ‘growth’ for the headline articles, but use the SuperRatings definition of ‘balanced’ when reporting on the top 30 performing funds over 5 years, every 6 months (see SuperGuide articles Super stars! Top 30 super funds over 5 years and Retirement performers! Top 30 pension funds over 5 years). The articles deal with the median growth or balanced option performance data. A return for a median fund is simply choosing the return for the fund in the middle of the list.
Understanding the types of superannuation investment options
Reminder: The balanced/growth asset allocation is the default option for most large super funds which means that the majority of super fund members have their superannuation money invested via a growth or balanced investment option. If you don’t actively choose your investment options for your super account, then your retirement savings will be invested in the default option. If you do actively choose your investment option/s then your super savings may be invested in another type of investment option such as ‘conservative’ or ‘high growth’ or ‘all growth’. See table below for the main types of investment options, as classified by ratings companies Chant West and SuperRatings.
For more information about your superannuation investment options, see the table below, and see the list of related SuperGuide articles immediately after the table.
Superannuation: Main types of investment options
|Highest risk||All Growth (100%)||High Growth (91-100%)|
|Higher risk||High Growth (81-100%)||Growth (77-90%)|
|Medium risk||Growth (61-80%)||Balanced (60-76%)|
|Lower-to-medium risk||Balanced (41-60%)||Conservative Balanced (41-59%)|
|Low risk||Conservative (21-40%)||Capital Stable (20-40%)|
|Lowest risk||Secure (0-19%)|
For more information…
For more information on how your superannuation savings are invested, including the types of investment options available and the risks you are willing to take, see the following SuperGuide articles:
- Want investments that help you sleep? Understand your risk profile
- Super control: How to switch your super account’s investment option
- Super pensions: choosing an investment option in retirement
- Responsible investment: A guide to investing your values with your super account
- Investment performance: Assess your super fund in 4 steps
- Investment returns: Does your super fund use a crediting rate or unit pricing?
For more information on investment performance data for superannuation funds, see the following SuperGuide articles:
- Top 10 performing super funds for 2017/2018 financial year (and previous years)
- Top 10 performing super funds for 2018 calendar year (and previous years)
- Super stars! Top 30 super funds over 5 years
- Retirement performers! Top 30 pension funds over 5 years
- Investment performance: We’re the best super fund. No, we’re the best…
- Mirror, mirror… what super fund is the best-performing fund of all?